Incidents:
The company released its three-quarter report for 2023. Revenue for the first three quarters was 3,242 billion yuan (-1.19%), net profit was 901 million yuan (+0.23%), and net profit after deducting non-net profit was 872 million yuan (+1.40%).
In the third quarter, the company's revenue was 1,135 billion yuan (-6.33%), net profit was 355 million yuan (-2.82%), and net profit after deducting non-net profit was 345 million yuan (-2.68%).
Incident reviews
The luminescence business continued to maintain steady growth. The 2023Q3 growth rate was about 14%, and the company's third-quarter results were under pressure. It is expected mainly due to the impact of the pharmaceutical industry policy environment and the high COVID-19 product base in the same period last year. We expect the company's chemiluminescence reagents to still achieve steady growth in 2023Q3. Chemiluminescence is 660 million yuan, a year-on-year growth rate of about 14%, which is comparable to the industry level.
2023Q3 has obtained a number of medical device registration certificates, including hypersensitive troponin T test kit (magnetic particle chemiluminescence method) and NT-proBNP test kit (magnetic particle chemiluminescence method), etc., which further enriched the company's product menu. The AutolumoA6000 series of next-generation high-throughput chemiluminescence immunoanalyzers launched by the company has functions such as dual-core escort and rapid detection. The installed capacity is relatively high in tertiary hospitals. Installation is expected to accelerate in the third and fourth quarters.
Continue to invest heavily in R&D and promote international business
The company spent 151 million yuan on R&D in the third quarter of 2023, accounting for 13.28% of revenue, an increase of 1.37pp over the previous year. The chemiluminescence and molecular testing menus are constantly being expanded. The AutoImoC6000, a fully automated coagulation analyzer in collaboration with Hicken Medical, has obtained a product registration certificate and can be connected to the X-1 assembly line. The progress of NGS sequencing research and development is in line with expectations, and related products are expected to be launched in 2024; the development of the triple quadrupole liquid quality combination system is progressing steadily according to plan.
Many of the company's products have also been registered overseas. In July 2023, the company's fully automated microbial mass spectrometry testing system, the Autofms series, obtained the IVDRClassC class registration certificate issued by the EU Notified Body. This is the first EU IVDR microbial mass spectrometry testing system product registration certificate in China. In September, the company's biological hepatitis B virus surface antigen (HBsAg) test kit (magnetic particle chemiluminescence method) successfully passed the European clinical assessment and obtained the first EU CEIVDRClassD certification in China. In addition, the company also participated in the Asian International Medical Laboratory Equipment and Medical Devices Exhibition, the American Clinical Chemistry Annual Conference and Clinical Experimental Medicine Expo. While promoting product registration, it is also actively expanding overseas customers. The future overseas business is worth looking forward to.
Investment advice
The company's 2023-2025 revenue is expected to reach 4.491 billion yuan, 5.254 billion yuan and 6457 billion yuan (previous values were 4.805 billion yuan, 5.540 billion yuan and 6.746 billion yuan respectively), with year-on-year increases of about 1.1%, 17.0% and 22.9%, respectively. Net profit from 2023-2025 will reach 1,258 billion yuan, 1,494 billion yuan and 1,816 billion yuan (previous values were 1,309 billion yuan, 1,618 billion yuan and 2,007 billion yuan respectively), with year-on-year growth Approximately 7.8%, 18.7%, and 21.6%, respectively. The 2023-2025 EPS is 2.15 yuan, 2.55 yuan, and 3.10 yuan, respectively, and the corresponding PE valuations are 21x, 18x, and 15x, respectively. In view of the company's comprehensive product line layout, forming a full product line layout of “immune diagnosis+biochemical diagnosis+microbiological diagnosis+molecular diagnosis”, the market share is gradually expanding, the comprehensive advantages are remarkable, and the “buy” rating is maintained.
Risk warning
There is a risk that the price of IVD collection will drop drastically.
The installation of high-speed machines has not progressed as far as expected risks.
Competition in the industry heightens risks.